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Question 1 The capital account balances of the partners in ABC Partnership on June 30, 20x before any necessary adjustments are as follows: Capital accounts A, Capital (20%) = 600, B, Capital (30%) = 1,000, C, Capital (50%) = 400, The partnership reported profit of ₱3,600,000 for the six months ende...

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Question 1 The capital account balances of the partners in ABC Partnership on June 30, 20x1 before any necessary adjustments are as follows: Capital accounts A, Capital (20%) = 600,000 B, Capital (30%) = 1,000,000 C, Capital (50%) = 400,000 The partnership reported profit of ₱3,600,000 for the six months ended June 30, 20x1. On July 1, 20x1, C withdraws from the partnership when he was bought-out by his copartners for ₱2,480,000 cash. How much is the capital balance of A immediately after the withdrawal of C? Response: 2,200,000

Question 2 The following are the capital account balances and profit and loss ratios of the partners in AB Partnership as of July 1, 20x1: A, Capital = 200,000 P/L = 40%; B, Capital = 400,000 P/L = 60%. On July 1, 20x1, C was admitted to the partnership when he acquired 20% interest in the net assets and profits of the firm for a P120,000 investment. The net assets of the firm as of this date approximate their fair values. How much is the capital balance of A after the admission of C if C’s admission was accounted for using the bonus method? Response: 190,400

Question 3 The statement of financial position of AB Partnership shows the following information as of July 1, 20x1: Cash 48,000 Receivable from A 32,000 Equipment

1,560,000

Total 1,640,000 Payable to B 40,000 A, Capital (40%)

600,000

B, Capital (60%)

1,000,000

Total 1,640,000 On July 1, 20x1, the partners decide to admit C as a new partner with a 20% interest. The net assets of the firm as of this date approximate their fair values. If no bonus shall be allowed, how much should C invest in the partnership? Response: 400,000

Question 4 The capital account balances of the partners in ABC Partnership on June 30, 20x1 before any necessary adjustments are as follows: Capital accounts A, Capital (20%) = 600,000 B, Capital (30%) = 1,000,000 C, Capital (50%) = 400,000 The partnership reported profit of ₱3,600,000 for the six months ended June 30, 20x1. C retires on July 1, 20x1. It was agreed that C shall receive cash of ₱2,000,000 and equipment with carrying amount of ₱400,000 and fair value of ₱1,200,000 as settlement of his interest in the partnership. The entry in the partnership’s books to record the retirement of C includes: Response: a debit to A’s capital for ₱240,000.

Question 5 The following are the capital account balances and profit and loss ratios of the partners in AB Partnership as of July 1, 20x1: A, Capital = 250,000 P/L ratio = 40%; B, Capital = 350,000 P/L ratio = 60%. On July 1, 20x1, C was admitted to the partnership when he

purchased half of A’s capital interest for P100,000. How much is A’s capital balance after the admission of C? Response: 125,000...